Token Raydium (RAY) Drops 31% as Pump.Fun Tests New AMM, Threatening its Key Role in the Solana Ecosystem
The price of Raydium (RAY) token plunged by 31%, reaching $2.89, following a major development on Pump.Fun. The platform, known for issuing memecoins on Solana, appears to be testing its own automated market maker (AMM), a move that could disrupt the market and threaten the trading volume generated on Raydium.
A New AMM That Worries Raydium
An associated URL found on Pump.Fun reveals a new swap tool, incorporating options for buying, selling, depositing, and withdrawing. Although no official announcement has been made, this development could have direct consequences for the future of tokens created through the platform.
Raydium in Danger? A Change of Model for Pump.Fun
Previously, Pump.Fun operated by redirecting liquidity from popular tokens to Raydium once they reached a market capitalization of $69,000. However, with its own AMM, Pump.Fun could retain these flows within its ecosystem, significantly reducing liquidity provision to Raydium and undermining demand for its native token, RAY.
A trader using the pseudonym @trenchdiver101, who spotted this development, explains that Pump.Fun seems to want to evolve its tokens towards its own liquidity pools instead of redirecting them to Raydium. Such a change would allow Pump.Fun to extract more fees on Solana or implement a reward mechanism for its users.
A Shock for Raydium, an Opportunity for Pump.Fun
Raydium’s dependence on Pump.Fun is notable, but the exchange platform continues to generate $500 million in daily trading volumes through major SOL/stablecoin pairs. However, if a significant portion of these flows were to disappear, it could impact its business model and prolong the decline of its RAY token.
Conversely, Pump.Fun, which does not yet have a native token, could see its revenue skyrocket with this proprietary AMM. The platform has already collected over $550 million in fees since March 2024 and recorded $2.4 billion in trading volumes in just two weeks. With more than 8 million tokens issued, the introduction of an integrated AMM could make Pump.Fun even more autonomous and profitable, reducing its reliance on third-party infrastructures.
A Strategic Turning Point for the Solana Ecosystem
If Pump.Fun’s AMM becomes a reality, it will mark a decisive turning point in the trading dynamics on Solana. Raydium, once an essential player, could lose a significant portion of its influence if other platforms follow suit. Meanwhile, Pump.Fun, already among the most profitable crypto applications, seems poised to redefine the standards of memecoin trading.
For now, investors are reacting negatively, leading to a sharp drop in RAY. The question remains whether Raydium will find a way to counter Pump.Fun’s rise or if this development will signify the beginning of its decline.
